Alfac Inc. (AFL) launched Aflac Benefits Solutions (“ABS”) with an intention of offering specialized services to major brokerage firms.
The subsidiary is based in Atlanta. ABS will provide the service with the help of business developers who are experienced in the field, along with consultants, strategic account marketers and account service executives, in order to augment the current support system.
ABS is designed to enhance the services provided to regional and mid-tier brokerage firms. In the current dynamic scenario of continuous change in health insurance benefits, brokers need support services to help employers withstand challenges. ABS, with the help of Alfac’s array of group and individual products and initiatives will offer support services to brokers.
ABS will assist the brokers with knowledge regarding the industry, and help them to with the know-how regarding voluntary benefits products and services, and also offering effective marketing and enrollment guidance.
We believe that the opening of an entirely separate unit to focus on providing support service to brokers will augment Alfac’s presence in the market. This in turn will help the company write new business, thus aiding its profitability.
Alfac on a stronger yen/dollar exchange rate and higher investment income related to portfolio de-risking, delivered a strong first quarter with operating earnings outpacing both the Zacks Consensus Estimate and the year-ago earnings.
The company has guided 2012 earnings in the band of $6.46-6.65 per share and expects earnings growth to improve further in 2013. The Zacks Consensus Estimate for 2012 and 2013 is currently pegged at $6.54 and $6.87 respectively.
We retain our long term Neutral recommendation on Alfac. The quantitative Zacks #3 Rank (short term Hold rating) for the company indicates no clear directional pressure on the stock over the near term.
Headquartered in Columbus, Georgia, Aflac, through its subsidiary provides supplemental health and life insurance.
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